CHICAGO, July 23, 2014 /PRNewswire/ -- Morningstar, Inc. (NASDAQ: MORN), a leading provider of independent investment research, today announced its second-quarter 2014 financial results.

The company reported consolidated revenue of $189.4 million in the second quarter, an 8.0% increase from $175.4 million in the second quarter of 2013. Excluding acquisitions, divestitures, and foreign currency translations, revenue rose 6.7% in the second quarter of 2014. Revenue excluding acquisitions, divestitures, and foreign currency translations (organic revenue) is a non-GAAP measure. The accompanying financial tables contain a reconciliation to comparable GAAP measures.

During the second quarter, the company recorded a non-recurring expense of $61.0 million--approximately $38.2 million after taxes, or 85 cents per share--related to a previously announced litigation settlement with Business Logic Holding Corp. As a result, Morningstar reported a consolidated operating loss of $24.8 million in the second quarter of 2014, compared with operating income of $43.6 million in the same period a year ago. Net loss was $9.8 million, or 22 cents per diluted share, in the second quarter of 2014, compared with net income of $31.1 million, or 66 cents per diluted share, in the second quarter of 2013.

Excluding the litigation settlement, Morningstar reported adjusted operating income of $36.2 million in the second quarter of 2014, a decrease of 16.9% compared with the second quarter of 2013. Adjusted operating income declined mainly because of higher compensation expense from additional headcount, reflecting new hires as well as acquisitions. Adjusted operating income is also a non-GAAP measure. The accompanying financial tables contain a reconciliation to comparable GAAP measures.

In June, Morningstar acquired HelloWallet Holdings, Inc., a provider of personalized financial guidance. Because Morningstar previously had a minority stake in HelloWallet, the company recorded a non-cash and non-operating gain of $5.2 million, which had a positive effect of 11 cents per share.

Joe Mansueto, chairman and chief executive officer of Morningstar, said, "We're glad to put the dispute with Business Logic behind us. While the settlement amount is meaningful, we want to move forward and focus on the continued growth and success of our retirement business without the risk, distraction, and uncertainty posed by the lawsuit."

He added, "Organic revenue growth for the second quarter was solid, and we're seeing momentum as we continue to invest in our existing business as well as in new initiatives. During the quarter, we acquired ByAllAccounts, Inc., a provider of data aggregation technology, in addition to HelloWallet. Client response to both acquisitions has been very positive. We also held successful investment conferences around the world--in Chicago, London, Madrid, and Sydney, along with our first pan-Asian Investment Conference in Hong Kong."

Financial Highlights

Revenue and Key Operating Metrics